Home > New Financial Incentive Program Could Break up the Clouds Over Solar Power

One of the greatest obstacles preventing widespread use of solar power on the rooftops of homes and businesses is the prohibitive cost of installing the systems. Recognizing that challenge, one electric utility has developed a program to make it more affordable for customers to have their own systems installed.

Detroit Edison has introduced a new program, SolarCurrents, which could cut the costs of installing a solar-power system by up to 50 percent. According to the utility, installation of a solar-power system for a typical 2,000-square-foot home or business can cost about $18,000. Under SolarCurrents, customers will receive a one-time payment when their system is installed equal to 50 percent of the anticipated renewable energy tax credit (RETC) generated by the installation of the system. The owner will receive the other 50 percent of the RETC prorated as monthly credits on his or her electric bill for the next 20 years. The utility boasts the combined payments will help customers reduce the cost of installing a solar-power system by 50 percent or more.

Furthermore, customers also will be eligible for federal and local tax credits as well as for net metering surplus electricity generated and distributed back to the grid for which they’ll receive a credit, all of which will help the customer realize additional savings that could cover up to 100 percent of the installation costs.

More than 1,500 customers are expected to take part in the SolarCurrents program.

In addition to encouraging Detroit Edison customers to purchase and install a solar-energy system, the program also was adopted to help the utility meet renewable-energy targets contained in comprehensive state energy legislation approved last year. The Clean, Renewable and Efficient Energy Act of 2008 requires Michigan’s electric utilities to provide 10 percent of their electricity sales from renewable resources by 2015.

Detroit Edison also plans to introduce a second phase of the SolarCurrents programs, in which the company will place large-scale solar energy panels it owns on customer rooftops or property. In return, Detroit Edison will pay long term leasing or rental fees to the property owners.